Guardianship or Power of Attorney:
Which One Do You Need?
What can you do when your close relative can no longer manage his or her own
affairs? Your relative might have had a stroke or have developed Alzheimer’s disease, for
example. These are just a couple of the reasons why a person might be unable to pay bills,
cash checks, and make important decisions.
If the sick person can still make some decisions and communicate, it might be possible for
him to appoint a person to handle his affairs. This is usually done by signing a power of attorney. However, if the sick person can no longer understand and make decisions, a guardianship may be necessary.
Sometimes it is not easy to figure out if your relative is still well enough to understand
and sign a power of attorney. You or your relative can speak with a lawyer to decide which
approach -- guardianship or power of attorney -- would be best. Your relative's doctor may
be able to determine if he is well enough to sign legal papers.
Guardianship
Guardianship is a legal procedure in which one person is appointed by a court to make decisions for someone who no longer can make decisions for himself.
There are 2 types of guardians: (1) A "guardian of the person" is appointed when people
cannot take care of their own personal needs, such as medical care. (2) A "guardian of the estate" is appointed if people cannot handle their own business or financial affairs. A "general
guardian" is someone who acts in both roles.
A person will be declared incompetent, and in need of a guardian, if he lacks sufficient capacity to manage his own affairs or to make or communicate important decisions about his
health, property or family.
Usually, you do not need a lawyer to ask to be appointed someone's guardian. The forms to
file a guardianship case are easy to fill out and can be obtained from your local courthouse.
Most courts will require that you get a letter from a doctor explaining why the doctor feels that
the person is incompetent.
If the incompetent person does not have a lawyer, the court will appoint a lawyer to represent the incompetent person at the hearing. This temporary representative is called a
"guardian ad litem. "The incompetent person also has a right to have a personal lawyer present
at the hearing. A jury trial or a broad evaluation of competency may be requested.
If you are appointed to be a general guardian or a guardian of the estate, you will need
court permission for many financial transactions on the incompetent person's behalf. A guardian of an estate must manage the business and financial affairs of the incompetent person in a
careful manner. The guardian must give a report each year of the receipts, payments, and other
transactions made that year.
If a person is still able to understand legal documents, signing a power of attorney may be
preferable to guardianship. With a power of attorney, the person chooses who will handle his
or her affairs, instead of having the court make this choice. It is handled out of court, and there
is no court supervision.
Power of Attorney
For those who need someone to handle their financial affairs, a power of attorney is very
helpful. It must be signed by a person who is mentally competent. The person must understand
what he is signing. This can be done either before a person loses mental capacity or, if this has
already happened, during a period that the person has regained capacity, if only temporarily. A
doctor could help determine capacity if there is doubt.
If the power of attorney is signed by a person whose competency "comes and goes," it is
important to have a written medical determination of competency at the time the documents
are signed.
A medical opinion is also helpful where the person has a progressive disease -- one that
gets worse, like Alzheimer’s -- in case someone later questions whether the power of attorney
is valid.
Probably the most useful type of power of attorney is the durable power of attorney.
Unless a power of attorney is made durable, the agent loses any power to act if the maker becomes incompetent. For most, that is precisely when the agent's assistance is necessary. A
power of attorney can be made durable with clear language in it stating that it remains effective
after the maker becomes incompetent.
The person who receives the power of attorney is known as the agent. Trust in the agent
is a crucial issue. The agent has the power to write the maker's checks, sell the maker's
property, and incur debt in the maker's name.
Sometimes, all that an incapacitated person needs is someone to take care of a Social Security check. Contact the Social Security Administration to see if you can become the representative payee. This is a person approved by the Social Security Administration to receive the
check and spend it for the incapacitated person. If your loved one needs someone to make
medical and health care decisions, a health care power of attorney is useful. Your loved one can
sign this document if he is mentally competent or during a period that he is mentally alert.
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Health Care Power of Attorney
The health care power of attorney goes into effect when a person lacks the ability to make
and understand medical decisions. At that time, the person named in the health care power of
attorney, the "agent", can make all medical decisions (or only those listed in the health care
power of attorney). The health care agent cannot make any decisions related to property or
bills.
Note: You should consult an attorney for specific legal advice.
This brochure is only general information.
Published by
THE ELDER LAW CLINIC
Wake Forest University School of Law
P.O. Box 7206
Winston-Salem, NC 27109-6226
(336) 758-5061
http://elder-clinic.law.wfu.edu/
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